Nissan Motor Company: Case Study of Operations Management

1929 words (8 pages) Business Assignment

13th Oct 2020 Business Assignment Reference this

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Generating Value

Operations management functions evaluation

Nissan Motor Company utilizes functions of operations management to provide quality products and services to their customers, to generate a considerable satisfaction value to them. As indicated described in the Nissan Motor Company case study, the company uses a simplified product like as compared to their competitors (Schmidt & Simchi-Levi, 2013). The company uses a strategy called build-to-stock model to maintain their high products status and to meet their customers’ demand. The use of this strategy in its operation managements helps the company to minimize its operational costs thus saving them money. This operation strategy leads to maximizing of profits.

Competitive Advantage Assessment

Nissan Motor Company has a competitive advantage over their competitors due to how it uses its operation management. The company also does an internal and external analysis to ensure that possible risks and threats are prevented, thus preventing the organization from suffering losses (Schmidt & Simchi-Levi, 2013). The company also does company analysis to find new ways of improving their operation management practices which will lead to quality product provision to their clients. The company management and their employees work together as a team during decision-making process thus leading the success of the company (Schmidt & Simchi-Levi, 2013). An example of this action is during the Japan Tsunami Crisis in 2011/2012. It caused a significant amount of damage to not only Japan, but also to many of Nissan Motor Company buildings. Nissan Motor Company had established a(n) Global Disaster control headquarters, they commenced recovery operations for each business location while confirming the safety and status of employees, vendors and suppliers (Shiga, 2012). This speedy, focused response was made possible by the drills and simulation that they practiced every year, designed to anticipate every eventuality following a natural disaster (Shiga, 2012). Nissan Motor Company had diversified its operation practices; its corporate office was made up of professionals who had experience in overseas operations. Nissan Motor Company also used build-to-stock as well as build-to-order strategy, simplifying its operation and increasing its product qualities (Continelli, 2017). This Ensures that they’ve met their customers’ demand in time, targeting certain areas of productivity. Their flexibility made is possible for them and gave them a competitive advantage (Schmidt & Simchi-Levi, 2013).

Compare and Contrast service operations and manufacturing operations

Nissan has two major components in their business, service operations and manufacturing operations. Although you would think that these processes would go hand in hand, there are differences in which you can still run a business even if one of them is not in a working order. For example, they are both similar in that they established statement objectivity on how the company will be run and the image the organization should represent to their clients (Schmidt & Simchi-Levi, 2013). Another comparison is that without the service operations there would be no need for the manufacturing operation, you need clients to sell your products and you need money from these clients to manufacture the product (Schmidt & Simchi-Levi, 2013). However, in cases like the Earthquake of 2011, the manufacturing plants suffer damage and cannot produce, but the service operations team can still work with existing inventory to continue to make sales. Therefore, benefiting customer satisfaction, which is the goal.

Theories and Techniques

Compare and Contrast the (CPM) and (PERT)

Project management can be understood as a systematic way of planning, scheduling, executing, monitoring, controlling the different aspects of the project, to attain the goal made at the time of project formulation (Key Differences, 2019). PERT and CPM are two of the most popular statistical tools used by business entities for management of projects. Program (Project) Management and Review Technique (Pert) is appropriate for the projects where the time needed to complete different activities are not known (Key Differences, 2019). The Critical Path Method (CPM) manages projects which are recurring in nature (Key Differences, 2019). PERT is a technique used for planning and time management as well as focuses on an event, while CPM is used to manage cost and time and focuses on an activity (Key Differences, 2019). For Nissan PERT is more suitable for research and development projects and CPM is more suitable more manufacturing. Nissan can use PERT in planning and creating a new model vehicle, once created CPM can determine the cost and time it will take to manufacture.

Steps used to develop a forecasting system

Forecasting systems can often be an overlooked part of business management. However, predicting future events can greatly help leaders make the best possible decisions (Dashboard Stream, 2017). Companies such as Nissan can greatly benefit by implementing and producing a forecasting system.

Steps for Forecasting

The Process

Identify the Problem

Know who the forecast is directed to, how the market works, and what your customer bases and competition are

Collect Information

The knowledge gathered by exerts and actual data.

Perform a Preliminary Analysis

To tell you if the fata is usable right away. Also, reveals helpful patterns and trends.

Choose the Forecasting Model

Choose the model that will give you the best prediction possible

Data Analysis

After choosing model, run data through it

Verify Model Performance

Compare forecast to actual data

At Nissan, it’s important that they forecast for future products as well as maintain a competitive advantage over other companies by meeting the demands for customers and keeping up with current trends. Nissan can use a forecast to determine supplies that are needed to produce certain models of automobiles. As well as keep up with trends that are popular. By doing this they will beat out other competitors and increase sells.

Major categories of supply chain risk and associated risk reduction tactics

Nissan has identified seven factor that enable stronger capabilities in both supply chain management and risk management. By matching their practices against these seven enablers, they can assess how mature or immature their capabilities are.

Enabling Factors

How they can enable the maturity or immaturity of the company(Kyratzoglou,2013)

Risk governance;

presence of appropriate risk management structures, processes, and culture (Kyratzoglou,2013).

Flexibility and redundancy in product, network, and process architecture;

having the right levels of flexibility and redundancy across the value chain to be able to absorb disruptions and adapt to change (Kyratzoglou,2013).

Alignment between partners in the supply chain;

 strategic alignment on key value dimensions’ identification of emerging patterns, and advancement toward higher value propositions (Kyratzoglou,2013).

Upstream and Downstream supply chain integration;

 information sharing, visibility, and collaboration with upstream and downstream supply chain partners (Kyratzoglou,2013)

Alignment between internal business functions;

 alignments and the integration of activities between company value chain functions on a strategic, tactical, and operational level (Kyratzoglou,2013).

Complexity management/rationalization;

 ability to standardize and simplify network and processes, interfaces, product architectures, and product portfolios and operating models (Kyratzoglou,2013).

Data, models, and analytics;

 development and use of intelligence and analytical capabilities to support supply chain and risk management functions (Kyratzoglou,2013).

With Nissan’s global disaster headquarters put in place prior to the earthquake of 2011, Nissan thought ahead of when a disaster was to strike. They had plans in place to deal with shortages and supply chain issues. Nissan utilized its manufacturing plants when the disaster hit, to ensure that everything needed such as supplies and parts were given to the areas that were affected. This resulted in less downed time on production lines. Being prepared like Nissan was, allowed them to maintain a positive output, something in which many other manufacturers had trouble doing.

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